DATE: Tuesday, August 26, 1997              TAG: 9708260005

SECTION: LOCAL                   PAGE: B8   EDITION: FINAL 

TYPE: OPINION 

SOURCE: BY ROBIN D. RAY 

                                            LENGTH:   52 lines

CITY'S FOUNDERS INN INVESTMENT MAKES SENSE

Our Economic Development Investment Program (EDIP) is designed to encourage investments in Virginia Beach for the purpose of returning real long-term benefits to the community. Objective criteria are used to evaluate projects being considered for funding, and the recently announced Founders Village retirement community more than meets this criteria. Similar developments in other parts of the country indicate that we can expect a high rate of return on this investment. It certainly does not ``bend existing guidelines,'' as suggested in your Aug. 18 editorial, ``Unanswered questions.''

This $100 million project will bring the city more than $700,000 a year in real estate taxes. Our intent is to provide the developers with an incentive of $250,000 per year for a three-year period to help provide infrastructure improvements to accommodate the development. Using simple arithmetic, we can see we recover our investment in just over 12 months and enjoy the returns for years to come. Furthermore, this development will need little support from city services since the streets, waste collection, security guards and lighting will be privately maintained, and it will not increase enrollment in our school system. The development will also generate $10 million annually in local purchases, supplies and labor.

Plans for Founders Village call for 301 independent upscale homes for retirees who can afford them. These retirees bring a significant purchasing power that affects the rest of the community. A recent University of South Carolina study equates the economic impact of each retiree to 3.7 manufacturing jobs. Also, the development will bring 170 full-time jobs.

The future master plan for this site includes development of a Class A clubhouse in Virginia Beach and an 18-hole signature golf course on CBN property in Virginia Beach and Chesapeake, providing additional tax revenues and fitting nicely into our vision of becoming a golf destination.

Any future project that is evaluated for EDIP funds will be subject to the same criteria - financial return on investment, capital investment in the community and job creation. These funds are also used as an incentive to lure developers who have other attractive options. As the editorial asserts, the need for moderate and low-income housing for seniors has been well-documented; however, not all of these projects would likely meet the objective criteria of the EDIP, and other avenues for support would have to be considered.

Projects that provide a real financial return on our investment help to pay for the basic service needs of our city and help to make up for those that do not contribute as much to our revenues. They are a part of an overall strategy to expand the tax base in a positive manner and to develop a diversified range of housing types that helps to move us toward our vision of becoming a community for a lifetime. MEMO: Robin D. Ray is chair of the Virginia Beach Development Authority.

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